
Spanish hatmaker says Trump tariffs threaten Orthodox Jewish tradition
Listen to article
A historic Spanish hatmaker says its 40-year tradition of supplying black felt hats to Orthodox Jewish communities in the United States is under threat due to new US tariffs imposed by President Donald Trump.
The Fernandez y Roche Industrias Sombreras Españolas factory, based in Seville, began facing a 10% import tariff in May, raising concerns that its long-standing business relationship with Jewish communities in New York and New Jersey may not survive the current trade tensions.
'This will be dramatic for us,' said Abraham Mazuecos, managing director of the 140-year-old factory. 'Our margins are tight, so we expect a decline in demand.'
The company exports around 30,000 hand-crafted hats annually to Orthodox Jewish customers in the US, accounting for about half of its total exports to that community. The other half goes to Israel.
The hats are worn daily by Orthodox Jewish men from the age of 13 and typically replaced every three years at prices ranging between $120 and $380.
Mazuecos said US clients may begin turning to domestic manufacturers, especially if tariffs are raised further. Trump has suggested an additional 50% tariff on EU goods, although negotiations with the European Union have been extended until 9 July.
'There are hat factories in the United States, but they are highly specialised in cowboy hats,' Mazuecos explained. 'It's a completely different product.'
Currently, Spanish-made hats account for around 20% of all black felt hats purchased annually by Orthodox Jews in the US, with the rest mainly sourced from Italy and China.
Mazuecos warned that the factory cannot afford to lower prices to absorb the increased costs, putting decades of trusted supply at risk.
The Trump administration has long criticised the EU for what it claims are unfair trade practices, using tariffs as leverage in ongoing negotiations.
If talks fail and higher tariffs are implemented, the Fernandez y Roche factory may be forced to cut production – a move that would disrupt one of the more unusual cross-cultural business ties between Europe and the US.
Hashtags

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Business Recorder
an hour ago
- Business Recorder
Asia shares, dollar slip as tariff tensions darken mood
SYDNEY: Asian share markets and the dollar made a soft start on Monday as U.S.-China trade tensions continued to simmer, while investors turned defensive ahead of key U.S. jobs data and a widely expected cut in European interest rates. There was little obvious reaction to President Donald Trump's threat late Friday to double tariffs on imported steel and aluminium to 50%, beginning on June 4, a sudden twist that drew the ire of European Union negotiators. Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. Beijing then forcefully rejected Trump's trade criticism, suggesting a call might be some time coming. White House officials also continued to play down a court ruling that Trump had overstepped his authority by imposing across-the-board duties on imports from U.S. trading partners. 'The court ruling will complicate the path ahead on trade policy, but there remains an ample set of provisions available to the administration to deliver its desired results,' said Bruce Kasman, chief economist at JPMorgan. 'There is a commitment to maintaining a minimum U.S. tariff rate of at least 10% and imposing further sector tariff increases,' he added. 'An increase in ASEAN to discourage transhipment looks likely, and the bias for higher tariffs on U.S.-EU trade persists.' Markets will be particularly interested to see if Trump goes ahead with the 50% tariff on Wednesday, or backs off as he has done so often before. In the meantime, caution reigned and MSCI's broadest index of Asia-Pacific shares outside Japan went flat. Japan's Nikkei fell 1.4%, while Hong Kong dropped 2.5%. South Korean stocks edged up 0.2% on hopes a snap presidential election on Tuesday would deliver a clear winner. EUROSTOXX 50 futures dipped 0.2%, while FTSE futures and DAX futures were little changed. S&P 500 futures eased 0.4% and Nasdaq futures lost 0.5%. The S&P had climbed 6.2% in May, while the Nasdaq rallied 9.6% on hopes final import levies will be far lower than the initial sky-high levels. Front-running the tariffs has already caused wild swings in the economy, with a contraction in the first quarter likely turning into a jump this quarter as imports fall back. The Atlanta Fed GDPNow estimate is running at an annualised 3.8% for April-June, though analysts assume this will slow sharply in the second half of the year. Data this week on U.S. manufacturing and jobs will offer a timely reading on the pulse of activity, with payrolls seen rising 130,000 in May while unemployment stays at 4.2%. Eyeing unemplyment A rise in unemployment is one of the few developments that could get the Federal Reserve to start thinking of easing policy again, with investors having largely given up on a cut this month or next. A move in September is seen at around a 75% chance, though Fed officials have stopped well short of endorsing such pricing. There are at least 11 Fed speakers on the diary for this week, led by Fed Chair Jerome Powell later on Monday. Fed Governor Christopher Waller did say on Monday that cuts remain possible later this year as he saw downside risks to economic activity and employment and upside risks to inflation from the tariffs. A softer jobs report would be a relief for the Treasury market, where 30-year yields continue to flirt with the 5% barrier as investors demand a higher premium to offset the ever-expanding supply of debt. The Senate this week will start considering a tax-and-spending bill that will add an estimated $3.8 trillion to the federal government's $36.2 trillion in debt. Across the Atlantic, the European Central Bank is considered almost certain to cut its rates by a quarter point to 2.0% on Thursday, while markets will be sensitive to guidance on the chance of another move as early as July. The Bank of Canada meets Wednesday and markets imply a 76% chance it will hold rates at 2.75%, while sounding dovish on the future given the tariff-fuelled risk of recession there. Widening rate spreads have so far offered only limited support to the U.S. dollar. 'The greenback remains near the lower end of its post-2022 range and considerably weaker than interest rate differentials would imply,' noted Jonas Goltermann, deputy chief markets economist at Capital Economics. 'Sentiment around the greenback remains negative and it continues to look vulnerable to further bad news on the fiscal and trade policy fronts.' On Monday, the dollar slipped 0.3% on the yen to 143.55 , while the euro edged up 0.2% to $1.1370 . The greenback even fell 0.2% on the Canadian dollar to 1.3727 , getting no tailwind from Trump's threat of 50% tariffs on Canadian steel exports. In commodity markets, gold firmed 0.6% to $3,310 an ounce , having lost 1.9% last week. Oil prices bounced after OPEC+ decided to increase output in July by the same amount as it did in each of the prior two months, a relief to some who had feared an even bigger increase. Brent rose $1.60 to $64.38 a barrel, while U.S. crude gained $1.74 to $62.53 per barrel.


Business Recorder
2 hours ago
- Business Recorder
Optimism continues, KSE-100 crosses 120,000 level
Bullish momentum was observed at the Pakistan Stock Exchange (PSX), with the benchmark KSE-100 Index crossing the 120,000 level, amid a gain of over 650 points during the opening hours of trading on Monday. At 10:10am, the benchmark index was hovering at 120,326.64 level, an increase of 635.55 points or 0.53%. Buying was observed in key sectors including cement, commercial banks, fertilizer, oil and gas exploration companies, OMCs and refinery. Index-heavy stocks PRL, HUBCO, PSO, SNGPL, MARI, OGDC, POL and PPL traded in the green. During the previous week, the PSX saw a mild recovery last week ended on May 30, supported by improved economic policy clarity. However, gains remained limited as investors braced for potential tax-related announcements in the upcoming Federal Budget. The benchmark KSE-100 Index closed at 119,691 points on Friday, recording a gain of 588 points or 0.49% on a week-on-week (WoW) basis, up from 119,102.67 points at the close of the previous. Internationally, Asian share markets and the dollar made a soft start on Monday as US-China trade tensions continued to simmer, while investors turned defensive ahead of key US jobs data and a widely expected cut in European interest rates. There was little obvious reaction to President Donald Trump's threat late Friday to double tariffs on imported steel and aluminium to 50%, beginning on June 4, a sudden twist that drew the ire of European Union negotiators. Speaking on Sunday, Treasury Secretary Scott Bessent said Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. Beijing then forcefully rejected Trump's trade criticism, suggesting a call might be some time coming. White House officials also continued to play down a court ruling that Trump had overstepped his authority by imposing across-the-board duties on imports from US trading partners. Markets will be particularly interested to see if Trump goes ahead with the 50% tariff on Wednesday, or backs off as he has done so often before. In the meantime, caution reigned and MSCI's broadest index of Asia-Pacific shares outside Japan went flat. Japan's Nikkei fell 1.4%, while Hong Kong dropped 2.5%. South Korean stocks edged up 0.2% on hopes a snap presidential election on Tuesday would deliver a clear winner. EUROSTOXX 50 futures dipped 0.2%, while FTSE futures and DAX futures were little changed. S&P 500 futures eased 0.4% and Nasdaq futures lost 0.5%. This is an intra-day update


Express Tribune
4 hours ago
- Express Tribune
Navigating towards sustainable growth
Listen to article In this article, I offer some insights into Pakistan's current economic trajectory and the challenges that lie ahead. This review highlights key areas such as growth, stability, inflation, tax policies and fiscal discipline, providing a nuanced understanding of the nation's economic health. Over the past three years, Pakistan's economy has shown resilience, moving from a state of high inflation and low growth to a phase of low inflation and recovery. While the economy has averted a crisis, growth forecasts remain subdued. This transition signifies a move in the right direction but also indicates that sustained efforts are required to achieve robust and lasting growth. The subdued forecasts suggest underlying structural issues that need to be addressed for more optimistic projections. The country's journey from near-collapse to a recovery mode is a testament to its resilience but also a reminder of the vulnerabilities that persist. Stability and C/A dynamics Pakistan's current account has achieved stability, a crucial development for maintaining economic equilibrium. However, this stability hinges on timely rollovers and meeting export and remittance targets. Dependence on external factors for maintaining stability highlights potential risks and uncertainties. Any disruptions in these areas could destabilise the economy. In the short term, uncertainties around the Trump Tariff remain one possible source, though it can also trigger opportunities. In the medium term, continued access to the EU market in the wake of India-EU free trade agreement (FTA) should remain an important goal. Diversifying sources of income and enhancing domestic productivity are vital to ensure long-term stability and reduce reliance on external aid and remittances. Inflation and monetary policy The headline inflation has declined significantly, but overall price levels have not followed suit. Core inflation, which is almost 9%, continues to be the linchpin of monetary policy, indicating the challenge of managing inflationary pressures. The reduction in headline inflation is encouraging, but the persistence of high price levels suggests underlying structural issues in the economy. Managing core inflation requires a multifaceted approach that addresses demand-side and supply-side constraints. Furthermore, transparent and data-driven monetary policies are crucial for maintaining public confidence and ensuring economic stability. A reduction in interest rate from 22% to 12% is a significant positive development and private sector credit has started to increase. Tax policies and tariffs reform Pakistan's tax policy is undergoing positive changes with the expansion of the tax net to more sectors. However, tax rates remain "punitively high." The government's intention to abolish the non-filers category is a step in the right direction, however, half of the current tax filers do not contribute anything. This structural problem of tax collection needs to be addressed to maximise revenue. Customs tariff reforms have also been initiated, indicating a broader effort to overhaul the tax system. Reducing tax rates while broadening the base could stimulate economic activity and increase overall tax revenue. The tax structure has significant implications for businesses, investments and overall economic activity. Fiscal discipline, public expenses Historically, the actual current expenditures have surpassed budgeted levels, while development spending has fallen short. Currently, the fiscal trajectory aligns with the budget, which is a positive development. Public expenditures on subsidies have declined from 16.2% in 2022 to 7.2% in 2024, indicating a more focused approach to resource allocation. Defence expenditures have also seen a reduction, falling from 22% to 12.4% of total expenditures, though a substantial increase is imminent. However, the increasing gap between budgeted and actual expenditures on the Public Sector Development Programme (PSDP) is concerning. Efficient allocation of funds can significantly boost economic growth. Revenue losses, tax evasion On the upside, almost Rs9 trillion is stuck in the system and even a partial recovery can bring dividends without burdening the existing taxpayers. The Tax Expenditure Report 2024 indicates a revenue loss of Rs3,879 billion due to tax concessions and exemptions. Income tax, sales tax and customs duty losses are substantial, highlighting significant gaps in tax collection. Additionally, the annual tax revenue loss due to illicit trade is estimated at Rs750 billion. Furthermore, Rs4,457 billion in tax revenue is stuck in over 100,000 court cases. Addressing these issues is critical for increasing government revenue and improving the fiscal health. The government needs to strengthen tax enforcement, streamline legal processes and formalise the undocumented economy. Conclusion The budget 2025-26 presents an opening. While progress has been made in certain areas, significant challenges remain. The government must focus on maintaining stability, controlling inflation, reforming the tax system and ensuring fiscal discipline. Addressing tax evasion and the undocumented economy is also crucial for enhancing revenue collection. These efforts will pave the way for sustainable economic growth and prosperity. The nation's ability to navigate these economic challenges effectively will determine its future trajectory. The writer is the founder and executive director of PRIME, an independent economic policy think tank